Acquisition-hungry M2M Holdings announced today it had entered into a definitive agreement to add Knova Software to the company's growing CRM software brood. Knova, a provider of intelligent customer experience applications, will go to M2M for an estimated $47 million in cash, or $5 per share, with the deal expected to close in the first calendar quarter of 2007. The acquisition, which follows M2M's recent purchase of Onyx Software, adds service resolution management capabilities to M2M's offerings, and underlines M2M's larger plan for consolidation through acquisition in the CRM market.
Jeff Tognoni, CEO of M2M, says the company's reasoning behind the purchase is to improve its service portfolio. "One of the key pieces in CRM is e-service, which for us means extending the service offerings that we have in Onyx over the Web and allowing people to provide self help. Knova, to us, was the product leader in that space." Tognoni explains that as both products are SOA-enabled, Knova will easily integrate with Onyx's architecture. Both Knova and Onyx will maintain individual brand identity, as is M2M's plan for any of its acquisitions.
The adoption of Knova's e-service technology will push Web self service farther in the CRM space, according to Rob Bois, research director at AMR Research. Onyx's heavy involvement in service industries means an opportunity for Knova's Web self service solutions to play well in this channel. "Web self service is something companies tend to rank high, but it's just never developed as a big standalone market," says Bois. "I think maybe getting that channel will help grow that a little more aggressively."
M2M stands to broaden its customer footprint through Knova's existing customers, while Knova has the opportunity to increase adoption of its service resolution management solutions through M2M's broader customer base and existence as a public company. M2M intends to sell and market Knova and Onyx both as one integrated product as well as separate, individual offerings. Tognoni says that M2M is "one of the primary consolidators of the CRM industry," promising more such announcements in the future.

Bois believes that the acquisition is a significant move not only for the two companies, but also for the service industry as a whole. He explains that in the past, most companies viewed Web self service merely as a way to help reduce service costs. "Now it's viewed as a way to augment your customer service and build a higher level of service by giving customers a choice of getting information whichever way they want. It's a message that appeals to any industry."
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